Yes, the number of homes for sale in the Phoenix Metro market is dropping, and this inventory reduction is creeping into the higher price ranges, but Scottsdale has yet to see the surge and record setting sales that most of the rest of the valley have been experiencing.
Over at Click2AZ.com, I recently wrote A Shortage of Homes for Sale in Phoenix?:
As of April 5th, homes priced in the range of $175,000 were clearly in the seller’s market range, which is typically defined as 5 months or less of inventory. Homes priced in the range of $175,000-$275,000 (and maybe $300,000) are in the range, called a balanced market. All the higher price ranges, show a buyer’s market.
One month later, May 5th, shows a changed market. Homes priced in the range of $225,000 are clearly in the seller’s market range. while homes priced in the range of $225,000-$350,000 are experiencing a more balanced market. All the higher price ranges, show a buyer’s market.
In another week or so, we’ll see how things look, but I expect the lower end of the market to show an even lower supply of homes for sale, and hopefully, we’ll see that there’s been more activity in mid and upper ranges of the market.
Yet, with extremely tight lending standards for jumbo loans ($417,000 and higher), we may hit a ceiling. I hear lenders, buyer, and real estate agents all indicating this higher end of the market will be impacted until there are some changes made, but it does sound like there may be some signs of hope.
Scottsdale is particularly impacted by the jumbo loan situation. With an average home price of $611,678, and a median price of $437,500 (based on annual sales data), a significant portion of our market relies on these larger loans for financing. Many of the home purchases in the lower price ranges are cash or FHA financing, but other options are needed for many Scottsdale home purchases.
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